PropTech

Looking At An Investment Unit? Read This First!

Investment Unit

Purchasing an investment unit to rent out, to set yourself up for future residual income, or to secure your long-term financial situation is a positive step on many individual’s radars. 

There are many benefits to the Australian taxpayer for investing in a property. Benefits include negative gearing through to tax write-offs, and with strong property price growth over the past 25+ years, not to mention when you have finished paying it off, you can sit back and enjoy the weekly rental returns in your pocket.

A residential unit or apartment for the purpose of investment is sound practice and often the first for ‘mum and dad’ investors looking to slip their toes in the investment water. Features include a unit or apartment’s relatively small size, through to the ease to which they are often rented, right through to the relatively low up-keep they may have.

Investing in a rental unit

There can be many issues that arise, some big, some small ranging from the Opal Building disaster in Sydney, where the property started cracking only months after completion, and owners couldn’t recoup their costs, through to the body corporate fees, sinking funds and more. 

There can be minefields for investors without the right research, from the suburb, features in the building, sinking fund, body corporate, and tenancy issues – many of which can be avoided with a little planning and research.

A balcony is often a feature to consider for investors jumping in to purchase an investment unit or apartment. Regardless of whether it is a stunning cityscape, a romantic valley, or a brick wall of the adjacent building, a balcony is important and can be a deal-breaker for many tenants looking for a relaxing outdoor terrace or balcony space. Whatever style of balcony you have, do ensure it is in good condition and safe to use for the tenants. 

The true value of a balcony for investors and landlords

Whether you’re a new or seasoned investor looking to invest in a unit, put yourself in the tenant’s shoes. Walk in the property, and consider if you would like to experience walking in the door, opening the balcony door, and smelling the fresh air. 

“A report by Secret Agent Property Services suggests that one-bedroom apartments with balconies can be sold for 11.69 percent than those without. In two-bedroom apartments, the increase with a balcony is 8.40 percent.”

When it comes to rental yields and maximizing the outcome of the capital growth of your property over time, would you not prefer to invest in an apartment or unit that holds 11.69% or 8.40% above the alternative respectively? And in rental terms, the difference in monthly rental income should be not far off either.

So when looking for an investment unit either online or in showrooms with agents, ask first, “Where is the balcony?”. In today’s world, often developers overlook them on large, new developments – especially in the CBD and surround. But that doesn’t mean you have to.

Think residential investment, think superior returns, think capital growth, think balcony – it’s that simple.

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